Summary of Key Points
Plant Doctor, a 32-year-old domestic beauty brand, has been planning its IPO for nine years since 2017. It has undergone two rounds of inquiries, two delays, and three submissions of application documents. If successful, it will become the first cosmetics company listed on the main board of the Shenzhen Stock Exchange under a single brand name. However, its path to listing is fraught with challenges: its performance has stagnated over the past three years, its reliance on an offline franchise model has led to management issues and profit distribution problems, and there are significant internal control deficiencies (such as fines for false advertising and unlicensed operations) that have drawn regulatory attention. Despite attempts at transformation by hiring young endorsers like Wang Junkai, the success of its IPO remains uncertain.
I. Nine Years of Attempting to Go Public: Why the Constant Hurdles?
Plant Doctor's journey to go public has been akin to a long “marathon”: It initially applied under the name “Beizhi Technology” in 2017 but was not approved. The company completed its shareholding reform at the end of 2022 and sought guidance from CITIC Securities for its IPO in July 2023, with the original plan to complete it in four months. However, due to internal control issues (especially with franchise management), the process was delayed by 19 months. The first application was submitted in June 2025, aiming to raise nearly 1 billion yuan, but the process was halted twice due to expired financial documents. It wasn't until June 2026 that the company updated its prospectus and resumed the process.
The regulatory authorities raised several direct questions during these inquiries: Franchise compliance (how is it managing so many franchises?), Sudden dividend distribution (180 million yuan was distributed before the listing, with the controlling shareholder, Xie Yong, taking 149 million yuan; where did the funds go that were intended for the IPO?), and Internal control violations (the company's subsidiaries and stores have been fined more than 20 times for false advertising and unlicensed operations, and 27 beauty care stores lack health licenses). These serious issues have repeatedly stalled its listing process.
II. Performance Dilemma: Stagnant Growth and Declining Profits
Plant Doctor's revenue has remained relatively constant over the past three years, at around 2.15 billion yuan annually, with a compound growth rate of only 0.4% (almost no increase). Net profit peaked in 2024 and then began to decline. Compared to its peers, Plant Doctor ranks 13th among domestic beauty brands in terms of revenue in 2025. However, competitors like Guyu (with sales exceeding 6 billion yuan in 2025) and Banmu Huatian (with nearly 2 billion yuan in the first three quarters of 2025) are also pursuing IPOs, creating significant competitive pressure.
What's more concerning is its low gross margin: at 60.74% in 2025, it is more than 10 percentage points lower than the industry average of 71.98%. The company attributes this to the franchise model, which distributes profits to distributors; its direct-operated stores have a gross margin of around 73%, but the higher proportion of franchises results in profit being diverted.
The company's investment in research and development (R&D) has also been declining: the R&D expense ratio dropped from 3.53% in 2023 to 2.75% in 2025, and the number of R&D personnel was reduced from 166 to 125. This has led to a lack of innovative products, with the brand relying mainly on its older products for sales.
III. The Franchise Model: A Solid Foundation or a Time Bomb?
Plant Doctor differs from other domestic beauty brands, such as the online-only Perfect Diary, by focusing on an offline franchise model. It attracts franchises with no initial fee and had 4,268 stores by the end of 2025, 70% of which are located in third- to fifth-tier cities. While this model has helped it expand rapidly, it has also created issues:
1. Profit Distribution: Franchises account for over 60% of revenue, and distributors take a large portion of the profits, resulting in a lower overall gross margin.
2. Management Challenges: The large number of scattered franchises leads to inconsistent services and prices, causing customer complaints and damaging the brand image.
3. Compliance Risks: Some franchises operate without licenses or engage in false advertising (e.g., exaggerating product benefits), which has resulted in multiple fines from regulatory authorities. The company acknowledges that non-compliant franchises can hinder its development.
IV. Youthful Transformation: Can It Appeal to Generation Z?
To attract younger consumers, Plant Doctor has made several attempts:
- Hiring Wang Junkai as a face mask endorser for two years, Liu Yu (a representative of the traditional Chinese aesthetic) for its skincare line, and Zhang Kangle as a brand ambassador to target different young demographics.
- Implementing an “online ordering + in-store care” model to drive online traffic to physical stores.
However, these efforts have had limited success: online sales account for only 20%-30%, far lower than the industry average of over 50% for many domestic brands. Additionally, its in-store care service relies on physical stores, and young consumers are more accustomed to shopping online. Whether this “offline-to-online” strategy can appeal to Generation Z is still uncertain.
V. Outlook for Listing: What Remaining Hurdles?
The success of Plant Doctor's IPO depends on three key issues:
1. Internal Control Improvement: Can the company effectively address franchise management and unlicensed operations?
2. Performance Growth: How can it break the revenue stagnation? Will new products or expanded online sales help?
3. Competitive Pressure: With competitors like Guyu and Banmu Huatian also pursuing IPOs, will Plant Doctor's status as the “first single-brand cosmetics company” on the stock market distinguish it?
In an increasingly competitive domestic beauty market where capital is more cautious about listings, Plant Doctor must first strengthen its internal capabilities if it wants to succeed.
In summary, Plant Doctor's story reflects the challenges faced by traditional offline beauty brands in the digital age: they need to maintain their offline presence while adapting to online trends, expand through franchises while managing risks effectively. Its success or failure could provide insights for other domestic beauty brands looking to go public.